China: Structural Imbalances in Population

MU GUANGZONG, a professor of demography at Peking University, writes in the China Daily that a decline in the country’s birth rate “may lead to a structural collapse of the population” and that “taking care of the elderly has become an unbearable pressure for some young adults.”

Guangzong’s article begins here:

The nation’s low birthrate is an increasingly severe problem that will accelerate the aging of the population, increase the pension shortfall, and aggravate the gender imbalance.

According to statistics from the Sixth National Census released in April 2011, the country’s birthrate in the past decade has become one of the lowest in the world.

In 1979, youngsters under the age of 14 accounted for one-third of the total population, but by 2010, they accounted for less than 16.6 percent. The family planning authorities are worried about a baby boom if they relax the family planning policy. However, a no-birth culture has become popular among young people of marriageable age who were born in the 1980s and 1990s.

According to a survey conducted by the Beijing municipal institute of population research in 2006, 64.1 percent of the 248 young couples surveyed who would have been allowed a second child, as both the husband and the wife were an only child, expressed unwillingness to do so. One reason for young couples not wanting a second child or wanting to be DINKs – double income, no kids – is the skyrocketing cost of raising children. In addition, the intensified competition in China’s job market has already forced many young couples to put their careers first and postpone their plans to have their first child, let alone having a second one.

Worryingly, if this trend continues it may lead to a structural collapse of the population. According to the human resources white paper issued by the government in 2010, by 2035 China will face the situation where two taxpayers will be supporting one pensioner, while the number of taxpayers will be shrinking. Meanwhile, the decreasing supply of qualified labor will put a drag on the pace of economic development.

Since 2003, a growing labor shortage has spread from the southeast coastal areas across the country, suggesting the transfer of the rural labor force has passed the Lewis Turning Point and China has already lost its demographic dividend. The recent census indicates that the working-age population will begin to decrease between 2013 and 2015, and in the next 10 years the population aged between 20 and 40 may decrease by as much as 100 million. The slowing down of population growth and even a decrease in the population will cause domestic demand to atrophy and economic development will lose an important driving force. Even an immediate loosening of the family planning policy may not be that helpful in the short run, given the time it takes a new-born child to reach working age. READ MORE.